BTC lending is getting interesting

[PrivacyG]

Would you personally borrow against BTC you plan to hold long term, or would you rather just sell a small portion?

No.  I do not like Third Parties and try to rely on as few such relationships as possible.  I rather have my classic Bitcoin to Fiat exchange and then have no responsibility left to pay.

[snowpega]

There is nothing wrong with selling a small portion of your long-term holding if you get stuck in any emergency situation.
Because once you overcome your emergency situation, after that point you can again start accumulating using a DCA strategy. I faced such a kind of situation a long time ago, when I needed to sell my net Bitcoin holdings to fulfil a very necessary need.

This is a very long story that I have discussed many times on this forum, as far as I remember now.
Meaning of saying there is nothing wrong with using or comsuimh you little part of a long-term portfolio if you don't have any other option left. This is my point of view, not any financial advice to follow. DYOR!

[Ziskinberg]

Would you personally borrow against BTC you plan to hold long term, or would you rather just sell a small portion?

No.  I do not like Third Parties and try to rely on as few such relationships as possible.  I rather have my classic Bitcoin to Fiat exchange and then have no responsibility left to pay.

That would be the safest one. One don't have to compromised his bitcoin just to make a loan. Because no matter how you know the lender well, still you can't trust your bitcoin to any third party but keep it only to yourself. Instead, go with the classic one, have your bitcoin exchange to fiat, after that problem solved. Making it a collateral might be the easiest, but never the safest. Not because of volatility, but because bitcoin's value is highly precious, so trusting other people will be the hardest.

[PrivacyG]

Making it a collateral might be the easiest, but never the safest.

I can not imagine how a collateral would be easier than simply selling.

[Sonia_123]

Avoid going into your thoughts it's will not be that easy, focus on holding your bitcoin without any thoughts of sales or collateral because you can be caught up in the web.

Getting  a loan from the bank is also  risky because of the high interest and collateral and others which can pull you down to the extent of not being able to hold and accumulate your bitcoin the way you wished and if the pressure of trying to pay back their loan back, you will be forced to start selling to meet up the loan requirements .

It is better to get a soft loan from friends or anyone from the family who his willing to help the situation, and pay him back when you have the funds .

[Botnake]

Btc lending would not be that complicated if you do it with your trusted friend or colleague. As long as there is mutual agreement on the said collateral, I guess there's no reason to worry. But it would not be that bad if you also take time to sell a small portion of your bitcoin and benefit from it. Because selling isn't actually losing your bitcoin, the fact that it provides a solution to your current financial problem, that means you still end up profitable.

And yes btc lending is getting interesting, but with interest added on it, much better if you just sell a small amount of bitcoin and buy back when there is a good market opportunity to buy again, or when your funds are sufficient enough to accumulate bitcoin again.

[Z-tight]

Yeah, we have talked about BTC-backed loans a couple of times already and there are corporations that are actively offering this service, but its availability to you depends on the jurisdiction in which you reside. Of course these loans are not simply as straightforward like the op makes it out to be, there are certain terms and conditions that would make a lot of people uncomfortable.

I don't recommend BTC-backed loans, the idea itself isn't bad, but i never want to hand over my BTC to a third party. As long as you have 'temporarily' lost custody of your coins, you can never be 100% sure of getting it back.

[boyptc]

I don't recommend BTC-backed loans, the idea itself isn't bad, but i never want to hand over my BTC to a third party. As long as you have 'temporarily' lost custody of your coins, you can never be 100% sure of getting it back.

That is the point why those who would like to avail this service is they think that they can still get it back. While there are for sure who can have it back but they have to pay the interest in full together with the principle because that's the contract.

And no one knows what will be their situation in the next months and how long the period they agreed with.

Buying back might be hard when you have other obligations and financial needs to address with. But I think by selling it is easier and you have no loan that needs to get paid in your mind and you have to hustle in deadlines.

I rather have my classic Bitcoin to Fiat exchange and then have no responsibility left to pay.

This I agree with, no responsibility about paying but to each their own.

[mirakal]

Most of the lenders are not asking for collaterals for small amount. I think this is good and safe enough, borrow but on a limited amount. That way, you don't have to drag your bitcoin to become collateral, otherwise if you need a bigger amount, just sell directly your bitcoin. I think that is more practical than putting it as a collateral where everyone is hungry with bitcoin.

However, some still benefit from btc lending, despite of its high risk, but that's already an individual decision.

[Churchillvv]

Borrowing against your Bitcoin is a good idea but not good enough to me because it would have you exposing your self to the public and allowing for hacks or crypto related risks. Imagine borrowing against 60% of your bitcoin and then you left the world with your information that you have this total amount of bitcoin, using estimation you can guess how bitcoin is left leading to targeted attacks.

[Peanutswar]

[...]
If native BTC can eventually be used as collateral while staying on Bitcoin, that could open up a pretty interesting lending market.

Would you personally borrow against BTC you plan to hold long term, or would you rather just sell a small portion?

Seen some of the platform right now offering a lending with the bitcoin, which is you can earn extra yield and interest upon providing liquidity if you are heading for the bitcoin in a long term basis you can make a small profit still not losing the value of the bitcoin, also some of the trend right now is related into airdrops which is you are depositing some of the bitcoin amount in return there is a token reward, for me if you seek for a next halving this was a good opportunity to earn but of course this requires you to deposit your money to their platform ending you dont have the rights anymore with the bitcoin so invest what you afford to lose. Ideal have a diversification.

[iBaba]

One thing I’ve been wondering about lately:

If you’re holding BTC for the long term but suddenly need liquidity, selling it feels like you are about to lose your position and might never get it back at that price before you buy back in.

Borrowing against it makes more sense in theory, you get to keep the BTC, access liquidity, repay the loan, get your BTC back.

But the tricky part is doing this without introducing unnecessary custodians, bridges or wrapped BTC.

If native BTC can eventually be used as collateral while staying on Bitcoin, that could open up a pretty interesting lending market.

Would you personally borrow against BTC you plan to hold long term, or would you rather just sell a small portion?

Honestly I don’t see anything wrong with selling some of your bitcoin when you need cash, the  idea of keeping bitcoin while getting liquidity sounds good but you still have to repay the loan and when the price drops heavily you just added another risk to your self.

For me to put my self in that risk I would probably only sell what I needed if I have enough to cover it instead of putting my position at risk. Borrowing makes more sense for someone that has reliable income and knows how they will repay the loan. The native bitcoin part is interesting, if bitcoin could be use as collateral without depending on any custodian or wrapped asset and I can keep full control of my actual asset while borrowing, I think that would even make the whole idea safer and more attractive.

[jcojci]

I prefer sells my goods than selling BTC or borrow money, that makes me difficult to repay the loan. I don't know the collateral that I can use to borrow money so I don't want to makes myself in trouble. Besides I don't want to use BTC as collateral and I don't want to reveal my own of BTC to others.
I can try to make money from other ways and don't have to sell my good which will not gives me debt.

[SPIDERMAN008]

I see some downsides to borrowing against Bitcoin. Using collateralized borrowing with a volatile asset like Bitcoin is not the same as doing so with other assets because Bitcoin's price can fluctuate in short time , the borrower must have a strong financial position. a person must first ensure the ability to repay the borrowed funds in the future.

If a situation arises requiring a large sum of money, selling a portion of  Bitcoin holdings is a viable option. After all, if holding Bitcoin does not work to resolve such financial challenges, then the purpose of holding bitcoin is not actually working .

If the required amount is small and already hold  substantial or over accumulated Bitcoin position, selling a small portion often appears to be a good solution.And if someone insists on borrowing against Bitcoin, it is acceptable only if the debt itself does not depend on the performance of Bitcoin.

[m2017]

One thing I’ve been wondering about lately:

If you’re holding BTC for the long term but suddenly need liquidity, selling it feels like you are about to lose your position and might never get it back at that price before you buy back in.

The solution is simple: need to maintain reserves (or sources of income) in traditional currency to cover unforeseen expenses and avoid investing all your money in bitcoin. That way, you won't have to sell the asset under unfavorable conditions.

Borrowing against it makes more sense in theory, you get to keep the BTC, access liquidity, repay the loan, get your BTC back.

In theory, it looks good. But there is always a "but". What if you fail to repay the borrowed funds? In that case, you would have to either pay a fee for using the money or "sell" the pledged bitcoins to the lender, but under worse terms than if you had sold bitcoins directly on the market.

But the tricky part is doing this without introducing unnecessary custodians, bridges or wrapped BTC.

Intermediaries are unavoidable - and, consequently, their commissions. As usual, just like with payday loans, the fees will be high (after all, you’re planning to take out the loan for a short period, not for years, right?).

If native BTC can eventually be used as collateral while staying on Bitcoin, that could open up a pretty interesting lending market.

Something like smart contracts? Then you need the eth-network.

Ok, let's assume you managed to implement a way to "deposit" bitcoin as collateral while remaining on the BTC-network (a decentralized "wrapper" interface allowing interaction with the BTC-network?). But how would you receive the loan funds? In the form of USDT?

Would you personally borrow against BTC you plan to hold long term, or would you rather just sell a small portion?

It all depends on the terms (specifically, the fees). Overall, the idea looks interesting, as it allows to temporarily "plug a hole in your budget" using bitcoin without having to sell. I would be inclined to use this feature.

[FinneysTrueVision]

Bitcoin will never be used as a collateral because of its high volatile nature, using Bitcoin as a collateral will cause serious uncertainty for the lender and the loanee.

You can already borrow against Bitcoin through Coinbase and some other places, not to mention that people have been borrowing against wrapped BTC since the early DeFi days. In traditional finance, people take out loans against things that don’t have a fixed value like their house. Despite its volatility, Bitcoin might be more preferable to other kinds of collateral because lenders can easily liquidate it to avoid financial losses.

Rather than all this complications if you need money urgently and don't want to touch into your Bitcoin why don't you just get a loan normally without ever bringing your Bitcoin into play.

It is done when people believe the price of Bitcoin will go up and don’t want to miss out on potential profits by selling early.

[Outhue]

One thing I’ve been wondering about lately:

If you’re holding BTC for the long term but suddenly need liquidity, selling it feels like you are about to lose your position and might never get it back at that price before you buy back in.

Borrowing against it makes more sense in theory, you get to keep the BTC, access liquidity, repay the loan, get your BTC back.

But the tricky part is doing this without introducing unnecessary custodians, bridges or wrapped BTC.

If native BTC can eventually be used as collateral while staying on Bitcoin, that could open up a pretty interesting lending market.

Would you personally borrow against BTC you plan to hold long term, or would you rather just sell a small portion?

I don't look into such ideas twice because of the volatile nature of Bitcoin, how will this work when it's not a stable coin? I know that some DeFi projects have something this similar and that's why losses comes in a bear market, it's very risky, anyways there is nothing that still beats slow accumulation of Bitcoin, instead of trying to find ways to make money using your holding or others, if you want to get Loan try using something else, platforms can get hacked or collapse and run with your Bitcoin.

[348Judah]

If you’re holding BTC for the long term but suddenly need liquidity, selling it feels like you are about to lose your position and might never get it back at that price before you buy back in.

Borrowing against it makes more sense in theory, you get to keep the BTC, access liquidity, repay the loan, get your BTC back.

But the tricky part is doing this without introducing unnecessary custodians, bridges or wrapped BTC.

What is the trick there when you are only taking the risk of securing your asset with a third party platform and they are making profit from you, when you would have just simply make use of a non-custodial wallet and have your portfolio in it and then try to also have another wallet possibly a custodial storage for your emergency funds that can be used for any urgent needs.

If native BTC can eventually be used as collateral while staying on Bitcoin, that could open up a pretty interesting lending market.

Would you personally borrow against BTC you plan to hold long term, or would you rather just sell a small portion?

All these are no answer for me, I'm not going to consider these.

[SamReomo]

Would you personally borrow against BTC you plan to hold long term, or would you rather just sell a small portion?

I'll never borrow any other coin against Bitcoin instead I might sell a small portion from the holdings only when highly needed. But, again it depends on situation, in most cases I never need to sell my holdings as I hold good amount as emergency fund, I would rather take some funds from that one instead of selling my Bitcoin.

[Delaforetnoire]

Would you personally borrow against BTC you plan to hold long term, or would you rather just sell a small portion?

Taking out a loan is certainly risky when holding Bitcoin amidst such uncertainty. If there was certainty, taking a loan could be right but since I am moving forward depending on uncertainty, taking a loan there would not normally be right.

It is better to sell a small portion rather than taking a loan like this.